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Lou
Lou, Tax Preparer
Category: Tax
Satisfied Customers: 404
Experience:  25+ yrs Experience Personal Income Taxes - Former DM for H&R Block in California
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DO WE OHIO TAX ON A 2009 401K DISTRIBUTION

Resolved Question:

DO WE OHIO TAX ON A 2009 401K DISTRIBUTION
Submitted: 5 years ago.
Category: Tax
Expert:  Lou replied 5 years ago.

Hello and thank you for contacting JustAnswer. We appreciate the opportunity to be of service to you.

 

Can you give me a little more information? What is your question?

Customer: replied 5 years ago.
We took a 401K distribution in January 2009. Do we owe state tax on that distribution?
I assume we would have to pay a quarterly estimate if we owe Ohio tax on it.
Expert:  Lou replied 5 years ago.

The short answer to your question is "yes". The starting point for your Ohio income tax is your federal adjusted gross income, If you had a 401(k) distribution then it would be part of the amount.

 

You may be entitled to some credits based upon your age and whether or not you took a lump sum.

 

If you give me your dates of birth and whether or not you took a lump sum I can be a bit more specific about the credits.

Customer: replied 5 years ago.

If you give me your dates of birth and whether or not you took a lump sum I can be a bit more specific about the credits.

 

July 23,1949

 

I took out about 90% of my total amount. I am still working and still contributing as much as my employer matches.

 

Thank you for your help Lou. I work 3rd so I may check your reply later but I will accept your help.

Expert:  Lou replied 5 years ago.

It appears that you are not eligible for any of the Ohio retirement credits from Schedule B. The rules are prettty specific. I have suppplied a link to the Ohio instruction booklet. GO to page 25 and read the section:

 

Schedule B - Nonbusiness Credits

Line 48 - Retirement Income Credit

 

http://tax.ohio.gov/documents/forms/ohio_individual/individual/2008/PIT_IT1040_Instructions.pdf

 

The amount of tax that will be due when you file your 2009 tax returns will not only depend upon how much you earned but also the distribution. Your filing status & exemptions will act to reduce that amount but if you took a substantial sum you might be subject not only to Ohio & federal taxes but underpayment penalties & interest as well.

 

Based upon your age it loks as though you may not be subject to the 10% federal penalty for withdrawals prior to age 59 /1/2..

 

If you can give more specific particulars I can provide a ballpark estimate of you potential tax liablity for 2009.

 

I would also need the amount of you federal tax from 2008.

 

 

 

Here is a ;link to IRS Tax Topic 424 that addresses that issue:

 

http://www.irs.gov/taxtopics/tc424.html

 

 

Lou, Tax Preparer
Category: Tax
Satisfied Customers: 404
Experience: 25+ yrs Experience Personal Income Taxes - Former DM for H&R Block in California
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